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Angela Merkel reserves judgment on French result

By: | 06 May 2012

Angela Merkel has stayed silent in the immediate wake of Socialist Francois Hollande becoming her new counterpart in Paris, but her finance minister had earlier emphasised Germany will “not change our principles” if new governments elsewhere disagree with Berlin.

Ahead of the French election in which voters narrowly ejected Nicolas Sarkozy, Wolfgang Schäuble said on Friday: “We cannot renegotiate agreements after every election. Hollande knows that too.”

Chancellor Merkel has said the fundament of Europe’s fiscal pact was not up for renegotiation, as Hollande and an increasing number of other European politicians want.

However, European authorities have examined the possibility of incorporating more growth-centric policies into future plans for the Continent, to complement the austerity measures.

Both approaches are likely to come up for discussion when the leaders of the Continent’s two largest economies meet in Berlin next week.

It is expected Merkel will caution against wavering on agreed austerity, in the belief markets would be rattled by any weakening stance.

Support for the fiscal pact is one cornerstone of the European Central Bank in Frankfurt, heavily influenced by the Bundestag in Berlin, supporting struggling financial institutions, including French ones.

However, Merkel has problems of her own at home.

This weekend her governing coalition apparently lost its majority in the northern state of Schleswig-Holstein, however it was the junior party in the coalition rather than Merkel’s CDU that was largely responsible for the shock.

Merkel is expected to comment on Monday on Hollande’s victory in Paris.

Her finance minister also warned any new government arising from the parallel national elections in Greece would have to abide by commitments made by the last administration.

He said Greece would “have to bear the consequences” if Athens did not honour previous commitments, adding that “EU membership is voluntary”.